Working Paper: NBER ID: w10242
Authors: Eric Bettinger
Abstract: The Pell Grant program is the largest means-tested financial assistance available to postsecondary students across the United States, yet researchers have only limited evidence on the causal effects of these grants. This paper examines the effect of Pell grants on student persistence after the first year. The paper uses unique, student-level data from all public colleges in Ohio. The data include detailed financial data which allow me to identify small discontinuities in the Pell grant formula. I exploit these discontinuities to identify the causal effects of the voucher. The results based on discontinuity approaches suggest that Pell grants reduce college drop-out behavior. The results in this paper support other evidence that find a relationship between need-based aid and college completion (e.g. Dynarski 2002, Turner and Bound 2002).
Keywords: financial aid; Pell grants; student persistence; college dropout; need-based aid
JEL Codes: I2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Pell grants (I28) | college dropout behavior (I21) |
| $1000 increase in Pell grants (I28) | college dropout behavior (I21) |
| Pell grants (I28) | student retention (I23) |
| financial aid (I22) | student retention (I23) |